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California’s war with Trump

Mar 19,2018 - Last updated at Mar 19,2018

STANFORD — If one looks past the headlines of the media’s full-time Donald Trump coverage, one can discern a global shift in political, economic and cultural forces that might prove far more consequential for America and the world than the actual Trump presidency. Chief among these changes is the fraying of relations between central and subnational, and national and supranational, governments.

Americans primarily interact with government at the state and local level, through schools and roads, police and hospitals. And in California, among other states, demands for greater local autonomy are growing louder, occasionally echoing the rhetoric of Catalan secessionists or Brexiteers in the United Kingdom. With near-monopoly control of California’s state and local governments, the Democrats are trying to negate the effects of virtually all of Trump’s policies.

For example, a bill in the state legislature would offset the new federal tax law’s limit on state income- and property-tax deductions — a provision that will hit California hard because it has one of the highest tax rates in the country, and its residents own expensive homes. Under the proposed state law, Californians would be allowed to “donate” their state taxes to a state shell charity as tax-deductible charitable contributions.

But the Internal Revenue Service will quickly see through this ruse. Charitable contributions are deductible at the federal level only if the donor receives no more than incidental value for the contribution, which obviously would not be the case in this situation. In fact, not even the fair-market value of a meal at a charity dinner is deductible.

Effective next year, the new federal tax law also repeals the individual mandate of the 2010 Affordable Care Act (Obamacare), which imposes a fine on those who do not purchase health insurance. Because the repeal could accelerate a surge in Obamacare insurance premiums, many California Democrats are demanding a single-payer government-funded health-care system, like those in Canada and Europe. Never mind that such a system might triple the state budget.

Moreover, because California considers itself the vanguard of green energy, state agencies have responded to Trump’s proposal to open up offshore oil drilling by threatening to ban the transportation of oil through the state, even in existing pipelines.

The source of the most contentious disagreement is immigration policy. Since declaring itself a “sanctuary city” in 1989, San Francisco has prohibited its police force from cooperating fully with federal immigration agents. But, as of last year, the entire state has been declared a “sanctuary”, and California Attorney General Xavier Becerra now plans to fine employers that cooperate with federal immigration officials. With tensions between federal and state law-enforcement agencies rising, many Californians are being put in the untenable position of paying state fines or violating federal laws.

On all of these issues, there are two opposing, partly valid arguments. Consider immigration. While the overwhelming majority of illegal immigrants are working to support their families and improve the lives of their children, some commit serious crimes or belong to violent gangs. Trump focuses on the latter to make the case for increased border security, often invoking examples of Americans killed by illegal immigrants who have returned after being repeatedly deported. Trump’s opponents argue that illegal immigrants themselves are often victims of, or witnesses to, serious crimes, but are reluctant to go to the police because they fear deportation.

Both sides have a point; but, sadly, they have ceased engaging with each other. Thus, when the Trump White House recently proposed a plan for immigration reform that offered something to both sides, it was instantly denounced by anti-immigration activists and pro-immigration crusaders alike.

Specifically, the plan would grant permanent legal status and a path to citizenship for 1.8 million people who were brought or sent to the country illegally as children. That is more than twice the number of people who were protected under former President Barack Obama’s Deferred Action for Childhood Arrivals (DACA) programme. In exchange, Trump wants an additional $25 billion for security on the border with Mexico, including his promised wall, and reforms to limit family-based legal immigration and favour higher-skilled workers, which is the norm in most developed countries.

Anti-immigration hardliners have rejected Trump’s plan as a form of amnesty. At the same time, the Democratic leader in the House of Representatives, Nancy Pelosi, has described it as a scheme to “make America white again”. But here is the rub: The Trump administration’s plan is the most realistic immigration-reform proposal in decades. If the Democrats were smart, they would curb their detestation, and recognise that Trump’s credibility with anti-immigration Republicans puts him in an ideal position to negotiate a bipartisan package.

As California continues its efforts to negate the Trump administration’s policies, one wonders if its approach will lead to a constitutional challenge. States certainly have the legal authority to adopt policies that are at odds with federal policy. In fact, the Tenth Amendment of the US Constitution explicitly reserves for the states all powers not delegated to the federal government. And states may sue the federal government, as Republican governors and attorneys general have done to overturn several Obama-era regulations and executive orders. 

But the US Supreme Court has repeatedly ruled that states may not nullify or contravene federal law, a right some southern states claimed in the mid-twentieth century to resist school integration. This is a constitutional principle that dates back to the mid-nineteenth century, when the Supreme Court overturned a Wisconsin Supreme Court ruling that nullified the abominable Fugitive Slave Act of 1850.

In less than nine months, California will hold elections for governor, a US Senate seat, and 53 seats in the House. So, the rhetoric of “resistance” to Trump is likely to become even more heated, and the courts are likely to find themselves ever busier sorting out what is and is not legal.

 

Michael J. Boskin, Professor of Economics at Stanford University and Senior Fellow at the Hoover Institution, was Chairman of George H.W. Bush’s Council of Economic Advisers from 1989 to 1993. Copyright: Project Syndicate, 2018. www.project-syndicate.org

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